As the world's leading provider of confidential insider information from 1979 to 2000, Auto Industry Newsletter has now re-emerged by popular request to provide chief executives with the insight necessary to meet today's challenges.
Editor: John Mortimer

Tuesday, 5 December 2017

Torotrak plc, well
known for the paucity of late of vital shareholder information, is expected to
make a statement later this month about Flybrid Automotive.

The founders of Flybrid Automotive are looking to
extricate themselves from what appears on the surface to be the debris of
Torotrak Plc.

Flybrid developed a name for itself through its
flywheel technology (and patents) – a means of absorbing energy which, at a
later stage can be released as a device to improve fuel economy, or boost power
output.

In a statement, Torotrak plc, a developer and supplier
of emissions reduction and fuel efficiency technology for vehicles, announces
that, further to the announcements on 28 November 2017 and 1 December 2017, the
Board has received notification that Jonathan Hilton and Douglas Cross have
filed an application for administration for Flybrid Automotive Limited.
application is listed for hearing on 15 December 2017.

The Board meet with its administration advisers to
consider if any value can be generated from its assets or whether the Company
should to be put into administration.

The Company will make further announcements in due
course.

It may be recalled that Hilton has recently completed
a year as president of the UK’s Institution of Mechanical Engineers.

Hilton joined the Institution as a young member in
1982 when he started his engineering career with Rolls-Royce military engines
group at Leavesden, Hertforshire. Completing the Rolls-Royce undergraduate
training scheme and graduating from the Hatfield Polytechnic, Jon took a first
appointment in helicopter engine design.

His passion for engines led him to Formula One and in
1991 he moved to Cosworth where he rose up the ranks from engine designer to
chief engineer of the F1 programme by the end of 1997. In 1998 Jon moved to the
TWR Arrows team as chief engineer of the F1 Engines group and here he built up
a team of skilled engineers to design and develop F1 engines for TWR.

In early 2003, Hilton moved, along with the whole of
his F1 engines team, to Renault F1 where he formed the UK based engine division
for the team. As technical director Engine Division, Hilton was involved with a
successful period for the team, which won driver’s and constructor’s Formula One World Championships in 2005 and 2006.

In January 2007, Hilton with former Renault F1
colleague Doug Cross, formed a new engineering company called Flybrid
Automotive to develop high-speed flywheel based hybrid systems for automobile
application.

As managing director, Hilton ran the company providing
direction for all activities and with prime responsibility for commercial
aspects of the business until January 2014, when Torotrak PLC acquired the
company. Hilton occupied a non-executive role as deputy chairman of the parent
company.

Hilton has held various official posts at the
Institution including chairman of the Midland Region, chairman of the
Automobile Division and chairman of the Formula Student organising committee.

Two years ago, in August 2015, following a period of “resetting the strategic focus of the fgroup to commercialise its technology”, new Torotrak chief executive officer
Adam Robson saw Torotrak’s key markets as being bus, off-highway and passenger
car with KERS (kinetic energy recover systems) and V-Charge appearing to take
centre stage compared with the company’s original focus of development, namely
infinitely variable transmissions (IVTs). Hmmm.

Interestingly,
it is understood Flybrid Automotive Ltd cost Torotrak plc of the order of £11 million in 2014 with a potential further £15 million should performance targets be met.
Unsecured loan notes of £1.8m, were given as part of the deal, and were
repayable subject to certain commercial targets being met. It is possible these
form part of the current dispute.

A few FTSE companies show their shareholders utter disdain by failing to correctly 'reward' them; Torotrak plc is certasinly one of them.

It now remains to be seen what happens to the technology, know-how and patents stored within Torotrak – and the value placed upon them.

Sunday, 3 December 2017

Torotrak
Group’s share price falls to an all-time low as the company appears to have
lost direction.

FRIDAY 1 December 2017
marked a grim day for Torotrak Group as its share price fell to an all-time
low. No statements seemingly are being issued and the company’s website gives
no email addresses for shareholders to contact staff.

The last news item
appeared 27 July 2017 when the company issued final year results for the period
to 31 March 2017.

On the basis of the latest
share price the company would seem to be almost worthless as directors appear
to have lost all sense of both direction, motivation and momentum. A sad testament to those
who have committed time and effort over the years to developing three main
technologies: Torotrak’s (Perbury’s) CVT, V-Charge and Flybrid. And Allison? Little seems to be heard about its involvement with the beleaguered UK company which was spun out if BTG all those years ago.

Thursday, 4 May 2017

Preston-based Torotrak, a developer and supplier of emissions
reduction and fuel efficiency technology in vehicles, is to close its Leyland
headquarters and make all staff based at the site redundant.

This is indeed the end of
an era. But the end cannot be allowed to pass without some comment being made.
For it seems that faith has been lost in the concept of traction drive
transmissions which had its heart in Leyland, Lancashire for so many years.

This is an era that many
people have forgotten about. Or not even aware. Some may regard it as a
nostalgic era, when the future appeared not only bright but lucrative.

The era extends back at
least until around 1962 (the actual date is unclear as one of the principal
participants is no longer alive) when a 1957 Hillman Minx fitted with a Perbury
continuously variable transmission (CVT) covered some 25,000 miles of testing to
prove the capabilities of the CVT developed by Forbes Perry of Perbury
Engineering Ltd.

Perbury Engineering developed
a CVT for a car project centred within the British Technology Group (BTG and formerly
NRDC) out of which blossomed Torotrak plc based at Leyland in Lancashire where
there was also a CVT programme, again based on the Perbury design.

The era certainly embraces
BL Technology, a small part of British Leyland, tasked with exploring new
technology and based at Gaydon, in Warwickshire – now the home of Aston Martin
and JaguarLandRover. Perbury-type transmissions were developed on this former
RAF airfield site.

It is fair to say that
designs of the Perbury transmission were based on the Hayes transmission (once
fitted to Austin cars), it being the point at which Forbes Perry’s designs
began to evolve and improve this type of transmission. He probably started serious
work circa 1957.

A great deal of water has
passed under the bridge, most of it happening within the confines of the
facilities in Leyland Truck & Bus which undertook some work in applying the
technology to buses. Facilities in Leyland near to the original truck plant became
the bedrock for Torotrak.

Executives of major automotive
companies made their way to Torotrak Leyland during the last 50 years, all in
search of the ‘perfect’ seamless transmission – that disappearing elixir. But
for one reason or another, the reality eluded everybody.

Perbury Engineering was
for many years the hub of the fountain of ideas. Yet no one liked to admit that
a stand-alone engineer knew more about the transmission than anyone else. It
was as if he did not exist. Boffins at Leyland believed they knew everything
and looked down their noses at ‘clowns’ working in workshops in deepest
Oxfordshire.

The little company in
Oxfordshire however built a variety of experimental prototypes including those produced
by Leyland Truck & Bus, from which people moved across to nearby Torotrak
as the company evolved.

Careers built on the back of CVT technology

Countless technical papers
have been written down the years in Europe, Asia and North America, about CVTs
as engineers expounded their ideas about one tiny facet or another of the
design. Indeed, careers were forged on the back of the Perbury system.

Now it looks as though,
in a bid to cut costs, a huge slimming down process is under way which could
see the end of the Perbury-type transmission. Of course, many will dispute that
the current design is a Perbury design, as so many man-hours have been invested
in pushing out the frontiers of knowledge to expand the power base of
understanding of this simple design which relies on traction drive
characteristics.

Torotrak plc, which
specialises in the use of ground-breaking KERS technology for buses and
V-Charge to boost the power of smaller engines for cars, has seen its share
price tumble as the car industry has turned its attention to electric cars
instead of making traditional engines more efficient.

Interestingly, none of the directors of the company have any history in toroidal transmissions - a passion to drive the technology forward into the market place. None has held board directorship for longer than four years, with the exception of non-executive chairmanNick Barter who joined in 2003. The most recent encumbent is Adam Robson, (April 2015). John McLaren and Rex Vevers joined in June 2013 while Jon Hilton, who is also president of the prestigious Institution of Mechanical Engineers, joined in January 2014.

In January, Torotrak
(which has seen chief executives come and go) announceda
strategic refocus of the group including the consolidation of its engineering
resources to reduce its ongoing cash operating costs. Indeed, it is possible that some may view Torotrak's acquisition of Flybrid Automotive as a clever device for the Silverstone-based company to reverse into Torotrak plc. Time alone will reveal the outcome.

The company, which also
has an office and workshops in Silverstone, has not given details of how many
people will be affected but company accounts to March 2016 show it employed 85
staff, 57 of which were engineers at the Leyland site, and it had a total wage
bill of £4.7million.

Significantly, perhaps,
the Silverstone unit was the technology hub for Flybrid Automotive which became
part of Torotrak and led to the emergence of Flybrid executives having a
greater say in the running of the company. After all, it was Flybrid Automotive’s
KERS technology which now appears to be driving Torotrak forward – if indeed it
is making any headway at all.

Last year’s Torotrak plc pre-tax
losses almost doubled to £14.3million on a turnover of £1.2 million. Could
Torotrak be on the verge of throwing in the CVT towel? It appears not from
today’s statement. But who knows the truth?

“The board
continues to focus on realising value from Torotrak’s technology portfolio and
other assets,” Torotrak said today in a stock market statement.

The group
said it expects to close the financial year to the end of March with £5.1 million
in cash, in line with expectations but added that the net assets of the company
will fall below half of the value of the called-up share capital.

Under
Section 656 of the Companies Act 2006, when this happens the directors are
required to call a general meeting of the company to discuss whether steps
should be taken to deal with the situation. It will hold this meeting on 31st
May.

“The board
does not consider that any steps are required to be taken beyond those already
in hand and accordingly, no resolutions will be put to Shareholders at the
General Meeting,” it said.

So there
we have it. The company rumbles on. The question has to be raised, after this
recent activity: just how long can Torotrak survive? The technology does not
seem to be attractive enough for an OEM to step in and buy the company to add
to its portfolio. But of course this could change.

Only in
the minds of those ‘running’ Torotrak is there perhaps the germs of ideas to
take the technology strands forward. But these minds are holding their real thoughts close to their chests. Whether the truth of Torotrak's collapse ever emerges remains to be seen.

JaguarLandRover (JLR), the UK's leading manufacturer of premium luxury
vehicles reported its best February retail sales figure of 40,978 vehicles, up
nine per cent on February 2016, driven by strong sales performances in China
and North America.

Monday, 6 March 2017

It is quite clear that executives of General Motors Europe and PSA Group have been working behind the
scenes for quite some time in secret to cobble together a deal to off-load
General Motors’ Europe (GME) vehicle-making operations.

Expect some changes at
Navistar International Corporation now that two top Volkswagen AG executives
are on board the train following the authorities‘
approval of Volkswagen Truck & Bus GmbH's stake in U.S. partner Navistar
International Corporation.

Another automaker is expanding the
driverless vehicle bandwagon. Renault-Nissan Alliance and Transdev have signed
up to a research contract to develop mobility services system for self-driving
vehicles. In so doing they are to jointly develop driverless vehicle fleet
system for future public and on-demand transportation.

Sunday, 26 February 2017

For the third year,
the PSA Group has achieved growth of the Automotive division operating margin
to 6 per cent 5% in 2015; growth in vehicle sales to 3.15 million, up 5.8 per
cent; and growth of its net financial position due to €2.7 billion free cash
flow; and finally a group recurring operating income up 18 per cent compared
with 2015 of €3,235 million.

Saturday, 25 February 2017

Volkswagen Group is
making progress despite the diesel crisis with sales revenue exceeding expectations,
increasing by €4.0 billion to €217.3 billion. Group's operating result before
special items reached €14.6 billion.

Tuesday, 14 February 2017

Hindustan Motors, owned by the C K Birla Group, has
sold the Ambassador brand name to Peugeot SA in a the deal closed last Friday
and said to be worth Rs 80 Crore. Production of Ambassador cars stopped around
three years ago.

Sunday, 12 February 2017

Nissan
UK claims
that while stronger business across the European continent, helped by high
demand for Qashqai and X-Trail models, has pushed sales higher difficulties in
Japan have given the firm's financial performance a knock.

Thursday, 9 February 2017

McLaren
Automotive's new Composites
Technology Centre will be responsible for the development and manufacturing of
the Monocell and Monocage carbon fibre chassis in future McLaren cars from 2020
onwards.

Monday, 30 January 2017

As if to emphasise the growing shift to
electric vehicles (EVs), General Motorsand Honda have set up the auto industry’s first manufacturing
joint venture to mass produce an advanced hydrogen fuel cell system that will
be used in future products from each company with SOP set for 2020.

When a company begins a statement to the effect that “priorites have
changed”, you know there’s trouble ahead. And so it is with Torotrak which is refocusing
on KERS and IVTs. And it's all the fault of EVs and diesel technology.

Sunday, 22 January 2017

As UK Prime Minister,
Teresa May, become the first foreign leader to meet new US President Donald
Trump, focus will be on trade. And trade with Trump will be the one notion that
senior executives in the global automotive industry this weekend will be the
mulling the implication of Trump’s inauguration.

Wednesday, 18 January 2017

Opposed-piston engines
for road vehicles have proved to be a moving target. Mystifying and elusive. Promises
are made and not fulfilled. But now it looks as though there could be light at
the end of the tunnel. But still the light at the end of the tunnel is set for 2018.

Tuesday, 17 January 2017

Vauxhall has revealed it all-new Crossland X, what it sees as a
second vital ingredient to the company’s burgeoning SUV offering, which is due
to grow still further in 2017 with the launch of the larger Grandland X later
in the year.

The US Environmental Protection Agency (EPA)
and the California Air Registration Board (CARB) have a proved a 'fix' for
67,000 of the 475,000 Volkswagen and Audi 2-litre diesel engines programmed to
'cheat' US emissions tests.

Sunday, 15 January 2017

As shares in Renault
fell sharply late last week following reports that French prosecutors are
investigating the carmaker over possible diesel emissions claims, Cummins Inc.
has become the latest manufacturer to distance itself from the vehicle
emissions scandal.

Saturday, 14 January 2017

The US Environmental
Protection Agency (EPA) has lodged a complaint against Fiat Chrysler
Automobiles (FCA) of failing to
disclose software in 104,000 diesel pickups and SUVs that allows them to exceed
pollution limits.

Sunday, 8 January 2017

Ford, the US’s leading
truck leader, now offers an all-new 3-litre Power StrokeV6
turbo diesel and the “next generation” 2.7-litre EcoBoost engine in the new 2018 Ford F-150. Ford now has a truck to more than match the Fiat Chrysler Automotive Ram 1500 with its VM Motori V6 turbo diesel and which, like the 'new' 3-litre V6 from Ford has a CGI vee cylinder block. Ford's move raises one simple question: How will GM, the sleeping giant, respond? Will the 'new' 4.5-litre Duramax appear sooner rather than later? Another vee CGI diesel? The US rumour mill says the CGI Duramax will bow in summer 2018.

Friday, 6 January 2017

New funding for cleaner US school buses announced
by the Environmental Protection Agency (EPA) will allow for significant air
quality improvements by replacing older diesel buses with newer, more efficient
technology – primarily advanced clean diesel technology. EPA is awarding $7.7 million to replace or retrofit
401 older diesel school buses in 27 states under the Diesel Emissions Reduction
Act (DERA).